NEW DELHI: The Narendra Modi 3.0 government has started with a bang, for the infrastructure sector. Within three months of assuming office, core sector projects worth Rs 3.31 lakh crore have got the Cabinet’s nod.
Not just the approvals, the actual spending has also picked up. In July the capital expenditure was almost double of May and June, which were the peak election months.
The biggest focus area is the road sector – be it expressways or rural roads. The new tenure has also brought in a change in approach to the infrastructure wityh regard to other areas like railways and hydro power.
However, private sector participation continues to be low in key areas like highways and railways, while there has been pick-up in public private partnership projects in seaport sector. The government avers the pace of infrastructure creation won’t be slowed due to financing constraints. While reliance on Budget funds is high and rising, efforts are being made to mitigate the burden on the exchequer via monetisation of brownfield assets –operational highway stretches and railway stations, land parcels etc This strategy appears to be more rewarding in the highway sector where both the toll-operate-transfer and the InvIT routes being employed with vigoour to raise resources via monetisation.
Still, analysts see early signs of a slowdown in infrastructure investments, and stress the need to bring in more private funds and global patient capital.
From the grand vision of Bharatmala Pariyojana, ashift has been made to “Vision 2047”. The approval for new projects under Bharatmala was stopped in November last year and in August this year the first tranche of eight National High Speed Corridor projects was cleared by the Cabinet. The total cost of these projects will come to around Rs 50,655 crore and will result in the building of 936 km of highways.
Another Rs 40,000 crore and Rs 50,000 crore of such access controlled projects are in pipeline and by December a total of Rs 2 trillion worth of highway projects would be approved, Minister for Road Transport and Highways Nitin Gadkari said at Indian Express Idea Exchange. The government’s plan is to have 50,000 km of expressways in the country functional. At present 4,000 km of expressways are already functional and construction work of 6.000 km more is in progress.
The plan is to increase logistics efficiency. The government’s aim is to break into the top 25 of the ranking by 2030. In 2023 India was ranked 38 out of 139 countries in the Logistics Performance Index ( LPI) of the World Bank. For logistics efficiency the enhancement of the highway network seeks to increase the average speed of a freight truck to more than 90 km per hour by 2047 from 25-40 km per hour now. Expressway expansion plan is expected to be completed by 2037, according to the Ministry of Road Transport and Highways. The increase in capacity of roads also aims to bring down the costs by half to Rs 1.6 per tonne per km by 2047
For people the aim is to increase the proportion of villages and towns that have accessibility or are just 50 km away from the trunk road network to more than 95% by 2030 from 89% at present. By 2047 the target is to get to 100%.
Aside from the limelight on expressways, work on Bharatmala projects already awarded continues. The remaining projects of the plan get absorbed in the Vision 2047. In its latest meeting the cabinet went ahead and approved the fourth leg of the Pradhan Mantri Gram Sadak Yojana that will cost Rs 70,000 crore to build 62,500 km of rural roads. This plan will connect 25,000 habitations.
For railways the focus is on reducing the freight cost to less than half of present by 2047 through investments that increase the speed of freight trains 100 km per hour from 24 km at present. The one railway project that has been cleared by the cabinet is a 309 km railway line between Manmad in Nashik and Indore at the cost of Rs 18,036 crore. This line will reduce the distance between Mumbai and Indore by 188 km. Four metro rail projects with a total cost of Rs 30,766 crore have also been approved. Another 11 railway projects which includes 967 km new lie and 121 km multi track have also been approved with the total cost of Rs 31,133.
In the last 10 years Indian port capacity has doubled and the long-term vision in the shipping sector is to bring the turnaround time to less than 20 hours by 2030 from 24-36 hours. Another goal is to have two Indian ports in the world’s top 10 by 2047 and become a major player in cargo transshipment in the Indian Ocean region. The cabinet in June approved setting up of a mega sea port at Vadhavan in Maharashtra with the total cost of Rs 76,220 crore, which on completion will be among the top 10 ports of the world.
In aviation, an airport at Varanasi has been approved from new terminals at Patna and Bagdogra airports. Varanasi airport will cost Rs 2870 crore. Patna and Bagdogra will cost another Rs 2969 crore. A revised scheme for supporting enabling infrastructure of hydroelectric projects has also been approved. The approval has also come for 12 smart industrial cities
The new term for the government has begun with a bang on the infra front, as was widely expected. As external affairs minister S Jaishankar said, “India has been building one and a half to two new metros every year and constructing seven new airports annually for the past decade.” Will this pace be beaten remains to be seen but beginnings are promising.
Source: The Financial Express
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